As Dubrovin notes, a simplified identification is especially urgent for life insurance. He cites polls by Levada Center (RF), according to which, two-thirds of the Russian population do not save at all and in a critical situation do not have any financial cushion. According to VCIOM polls, more than half are somehow familiar with different financial instruments and are even ready to use them for long-term savings. Unless, of course, the state guarantees these investments, like a bank deposit, and gives equal terms for financial organizations, the expert notes.
According to him, the more people have the opportunity to create regular savings, the closer we will be to the practice of developed countries: when citizens are not afraid of the thought of retiring, buying an apartment or entering children at a university. The average annual premium on life insurance per capita in developed countries was $1,899 in 2017, in Russia - $43, less than in India ($54).
The insurers are actively developing simple, inexpensive, mass insurance policies for long-term savings. If a person wants to start making deductions from his salary for a future pension or child education, he does not need to go to the office of the insurance company or meet with an insurance agent to show his passport and identify his personality. Most people will prefer to do this remotely. The same should be with the life insurance policy, believes Mr. Dubrovin.
The main problem is the risk of money laundering, according to the recommendation of the 10th international organization “Financial Action Task Force on money laundering” (FATF). But this is a risk-based approach: if the threat of money laundering is high, then the financial institution is obliged to check the client, if not, then simplified identification is allowed. The group believes that the risks of illegal withdrawal of funds through life insurance contracts with an annual premium of less than 1 thousand US dollars/euros, pension insurance without the right of assignment, as well as for “clearly defined and limited in volume financial products” are low, that is, there is no chance or sense to launder money, the expert writes. However, according to him, it is possible to check the client even with simplified identification using the same unified databases (in Russia this is USIA-state services, IEIS), which contains enough information.
Mr. Dubrovin suggests conducting a large-scale assessment of money laundering risks with the involvement of insurance companies for the possibility of introducing simplified customer identification in the life insurance field. In his opinion, the number of pros in favor of simplified identification prevails. For example: the average term of universal life insurance contract is 10 years. "For money laundering, it is simply too long," the expert said.
“The state with the financial organizations’ support, should battle this problem. The current situation though is more likely to create unequal terms for insurers and their competitors, non-governmental pension funds and the managing companies,” Viktor Dubrovin summarizes.
Photos are from open sources.